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Western Hemisphere > Belize

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Cover Policy Papers
Debt for Development Swaps: An Approach Framework
International Monetary Fund. Strategy, Policy, & Review Department
and
World Bank
The aim of this note is to help stakeholders optimize their decision-making on when, where, and how to use debt-for-development swaps (“debt swaps”), ensuring they bring the intended benefits to all parties involved. It also proposes new approaches to structure these mechanisms, making them less transaction-heavy and more sustainable while maintaining accountability for fulfilling policy and spending commitments. Debt swaps are agreements between a government and one or more of its creditors to replace existing sovereign debt with one or more liabilities1 that include a spending commitment towards a specific development goal. These goals may include nature conservation, climate action, education, nutrition, support for refugees, among others. The spending commitment is often associated with the country's decision to pursue an important development policy.
Keywords:
spending commitment; expenditure efficiency perspective; transparency policy; expenditure program commitment; expenditure commitment; debt sustainability prospect; debt amortization profile; Debt conversion; Debt service; Debt management; Debt sustainability; Global
Cover IMF Staff Country Reports
Belize: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Belize
International Monetary Fund. Western Hemisphere Dept.
This 2023 Article IV Consultation discusses that economic activity has rebounded strongly from the pandemic in Belize. After growing by 15 percent in 2021 and 12 percent in 2022, real GDP is projected to grow by 2.4 percent in 2023 and 2.0 percent over the medium term as spare capacity is exhausted. The key policy priorities include reducing public debt to a level that provides sufficient buffers, increasing expenditure in priority areas, implementing growth enhancing structural reforms, and building resilience to climate change. These policies would boost growth and make it more inclusive. Boosting potential growth requires enhancing access to domestic credit, ensuring predictable access to foreign exchange to attract foreign direct investment, reducing crime, and adopting a disaster resilience strategy that strengthens structural, financial, and post-disaster resilience and is based on a multi-year macro-fiscal framework. Strengthening the sustainability of the currency peg requires implementing additional fiscal consolidation and growth-enhancing structural reforms, as well as limiting government financing by the Central Bank.
Keywords:
authorities of Belize; currency peg; authorities project growth; terrorism financing risk; reform agenda; Fiscal stance; Public sector; Global; Caribbean
Cover IMF Staff Country Reports
Belize: 2022 Article IV Consultation-Press Release; and Staff Report
International Monetary Fund. Western Hemisphere Dept.
The COVID-19 pandemic had a severe impact on Belize in 2020, leading to a 16.7 percent contraction in real GDP and a rise in public debt to an unsustainable level of 133 percent of GDP. To address this situation, the government presented a medium-term plan to lower public debt to 85 percent of GDP in 2025 and 70 percent in 2030 by implementing fiscal consolidation, structural reforms, and debt restructuring. Significant progress towards restoring debt sustainability was made in 2021.
Keywords:
expenditure measure; PFM legislation; policy priority; calendar year GDP; central bank of Belize; Policy discussion; IMF team; Fiscal consolidation; Fiscal stance; Global; Caribbean
Cover IMF Staff Country Reports
Belize: Technical Assistance Report-Public Investment Management Assessment
International Monetary Fund. Fiscal Affairs Dept.
The level of public investment in Belize has varied over the past years in the context of existing constraints. The sharp increase in public debt has limited available fiscal space.1 This has resulted in an increase in externally financed investments as a share of the capital budget and a growing interest in public private partnerships (PPPs) to help achieve the government of Belize’s national strategy objectives.2 However, the correlation between Belize’s public investment and GDP growth remains weak, and the public capital stock as a ratio to GDP shows a sharp deterioration, possibly pointing to investment inefficiencies.
Keywords:
ISCR; CR; investment project; management process; cash flow; Project implementation; budget preparation document; investment plan; investment portfolio; investment priority; budget document; public investment; fiscal year; Public investment and public-private partnerships (PPP); Public investment spending; Budget planning and preparation; Capital spending; Capital budget; Central America
Cover IMF Working Papers
Back to the Future: Fiscal Rules for Regaining Sustainability
Mr. Serhan Cevik
This paper assesses the cyclicality and sustainability of fiscal policy in Belize and applies a stochastic simulation model to determine the optimal set of fiscal rules. The empirical analysis shows that fiscal policy in Belize has been significantly procyclical and unsustainable much of the period since 1976. While the government’s recent commitment to maintain a primary surplus of at least 2 percent of GDP until 2021 is supporting debt reduction, stochastic simulations indicate that further improvement in the primary balance is necessary to reliably bring the debt-to-GDP ratio to a sustainable path. Given Belize’s history of large economic shocks, this paper proposes explicit fiscal rules designed for countercyclical policy and debt sustainability. It recommends integrating such rules into a well-designed fiscal responsibility law and establishing an independent fiscal council to improve accountability and transparency.
Keywords:
WP; government; debt ratio; budget constraint; cyclically-adjusted government expenditure; Fiscal policy; sustainability; procyclicality; debt; fiscal rules; debt accumulation equation; government's fiscal policy; fiscal policy cyclicality; Fiscal stance; Caribbean
Cover IMF Staff Country Reports
Belize: Climate Change Policy Assessment
International Monetary Fund. Western Hemisphere Dept.
Belize is exceptionally vulnerable to natural disasters and climate change. It already faces hurricanes, flooding, sea level rise, coastal erosion, coral bleaching, and droughts, with impacts likely to intensify given expected increases in weather volatility and sea temperature. Hence, planning for resilience-building, and engagement with development partners on environmental reforms, have been central to Belizean policymaking for many years, since well before Belize submitted its Nationally Determined Contribution (NDC) to the Paris Accord in 2015. This Climate Change Policy Assessment (CCPA) takes stock of Belize’s plans to manage its climate response, from the perspective of their macroeconomic and fiscal implications. The CCPA is a joint initiative by the IMF and World Bank to assist small states to understand and manage the expected economic impact of climate change, while safeguarding long-run fiscal and external sustainability. It explores the possible impact of climate change and natural disasters on the macroeconomy and the cost of Belize’s planned response. It suggests macroeconomically relevant reforms that could strengthen the likelihood of success of the national strategy and identifies policy gaps and resource needs.
Keywords:
ISCR; CR; financial support; insurance coverage; risk pooling; budget system; capital expenditure; international community; mitigation strategy; climate change; capital budget; renewable energy; waste management; Climate change; Natural disasters; Public investment and public-private partnerships (PPP); Greenhouse gas emissions; Public investment spending; Caribbean; Central America; Global
Cover IMF Staff Country Reports
Belize: 2018 Article IV Consultation-Press Release; Staff Report; Informational Annex; Debit Sustainability Analysis and Statement by the Executive Director for Belize
International Monetary Fund. Western Hemisphere Dept.
Belize’s economic growth has slowed over the last five years, following decades of outperforming regional peers. As in other countries in the region, a central challenge is exiting the cycle of low growth and elevated public debt. Belize’s 2017 debt rescheduling provided cash flow relief. In March 2017, the government reached a restructuring agreement with private external bondholders on its US$526 million bond (about 30 percent of GDP).1 As part of the agreement, the authorities committed to tighten the fiscal stance by 3.0 percentage points in FY2017/18 and to maintain a primary surplus of 2.0 percent of GDP for the subsequent three years. The authorities are delivering on these commitments and have made progress in implementing recent Article IV recommendations (Annex I).
Keywords:
ISCR; CR; IMF-World Bank Climate Change Policy Assessment; policy priority; IMF staff estimate; liability positions vis-à-vis nonresident; growth prospect; Fiscal stance; Anti-money laundering and combating the financing of terrorism (AML/CFT); Public sector; Caribbean; Global
Cover IMF Working Papers
Public Investment Scaling-up and Debt Sustainability: The Case of Energy Sector Investments in the Caribbean
Ahmed El-Ashram
The question of how scaling up public investment could affect fiscal and debt sustainability is key for countries needing to fill infrastructure gaps and build resilience. This paper proposes a bottom-up approach to assess large public investments that are potentially self-financing and reflect their impact in macro-fiscal projections that underpin the IMF’s Debt Sustainability Analysis Framework. Using the case of energy sector investments in Caribbean countries, the paper shows how to avoid biases against good projects that pay off over long horizons and ensure that transformative investments are not sacrificed to myopic assessments of debt sustainability risks. The approach is applicable to any macro-critical investment for which user fees can cover financing costs and which has the potential to raise growth without crowding-out.
Keywords:
WP; cost saving; energy investment; investment project; investment scaling-up; management framework; Public Investment; Debt Sustainability; Growth; Energy Reform; Caribbean; User Fees; Public investment spending; Public investment and public-private partnerships (PPP); Public sector
Cover IMF Staff Country Reports
Belize: 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Excutive Director for Belize
International Monetary Fund. Western Hemisphere Dept.
This 2016 Article IV Consultation highlights that the economy of Belize is facing multiple challenges. GDP growth slowed to 1 percent in 2015 owing to falling oil production and reduced output in the primary commodity sectors, and turned to negative 1.5 percent in the first half of 2016 relative to the same period in 2015. The decline in oil and other commodity prices led to deflation in 2015. GDP is projected to decline by 1.5 percent in 2016. The current account deficit would slowly improve owing to a gradual recovery in major commodity exports, but would remain high, indicating a weak external position.
Keywords:
ISCR; CR; tax clearance certificate; tax clearance requirement; certificate; income tax tax office; staff appraisal; BTL share; Fiscal stance; Public sector; Global; Caribbean
Cover IMF Working Papers
National Insurance Scheme Reforms in the Caribbean
Koffie Ben Nassar
,
Mr. Joel Chiedu Okwuokei
,
Mike Li
,
Timothy Robinson
, and
Mr. Saji Thomas
Weighed down by population aging, slow economic growth, and high unemployment, National Insurance Schemes in the Caribbean are projected to run substantial deficits and deplete their assets in the next decades, raising the prospects of government intervention. With the region highly indebted, this paper quantifies the impact of three parametric reforms—freezing pension benefits for two years, raising the retirement age and increasing the contribution rate by one percentage point—that, if implemented, would put the pension schemes on a stronger financial footing. While the appropriate combination of reforms necessary to eliminate the actuarial deficits varies depending on each country’s circumstances, most countries need to undertake reforms now or risk even higher taxes, lower growth and unsustainable debt dynamics.
Keywords:
WP; retirement age; pension scheme; Jamaica; economic growth; rate; Social Security; Old Age Pensions; Public Debt; Contingent Liabilities; contribution rate; NIS viability; Jamaica NIS; contribution income; Pensions; Pension spending; Aging; Retirement; Income; Caribbean; Asia and Pacific; Europe; Global